Page 470 - Week 02 - Wednesday, 24 February 1993
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Probably of greater importance is the suggestion that liquor licensees have not been properly consulted nor their views obtained on the proposed new liquor arrangements. This is not true. On the issue of changing the rate from a uniform 10 per cent to 7 per cent for low alcohol and 13 per cent for high alcohol beverages - that is, those above 0.3 per cent alcohol content - the change was announced initially on 23 June 1992 and then in the budget. The subsequent decision to defer its introduction until 1 April was announced in a press release, and individual licensees were advised by letter in late November last year.
In relation to the new liquor scheme, the Commissioner for ACT Revenue commenced discussions with the liquor industry once the Government had approved the scheme. Such consultation involved discussions with leading liquor wholesalers and off-licensed retailers, the Licensed Clubs Association and the Australian Hotels Association. All licensees were notified in a letter issued in late January that changes to the scheme were being considered and that they would each be advised once these changes had been approved. This amendment will have no significant effect on licensees who commenced after 1 January 1992. They will continue to lodge quarterly returns, but these will no longer be adjusted for actual sales in the current period.
The two important issues for licensees commencing prior to 1 January 1992 are the abolition of the termination transfer provisions in the old Act, and the possible increase in fees payable in 1992-93 as a consequence of the updated base period. In relation to the first matter, under the current legislation old licensees pay tax based on purchases during a quarterly period commencing 15 months prior to the licence period - that is, fees for the April to June 1993 quarter are payable on 17 March 1993, based on purchasing during the January to March 1992 quarter. Should they cease to trade or transfer their licence under the existing liquor tax arrangements they will be required to make a payment equal to the unpaid fees collected from consumers but not yet paid to the Commissioner for Revenue. This liability is being removed from 1 July 1993.
The proposal to remove the termination fee provision in the existing legislation is justified because a termination fee is contrary to the concept of a pure franchise scheme - a licence to trade in the future - and in practical terms it is unlikely that the Territory would gain significant revenue from its operation, as most large licensees are clubs or companies and are unlikely to go out of business in a solvent state. Club licences are usually held in perpetuity and transfers of licence ownership where companies are involved usually occur through change of shareholder - that is, the licensee. That generally does not change.
On the second matter, under the new proposed scheme old licensees will be required to pay fees on 17 March 1993 in respect of purchases during October to December 1992. October to December is the quarter during which there are usually heavy purchases of liquor made each year, and movement of the relevant quarter will mean that old licensees will be required to pay fees in respect of purchases during two consecutive October to December quarters, both 1991 and 1992, which, for some licensees, will increase their fees for 1992-93. This is not unfair in itself because the licensees have collected tax from consumers which was included in the price of products sold in that quarter. If there is a problem it is simply in the timing of the tax payment. Instead of paying the tax for that quarter some 15 months after collection, the licensees will be required to pay the tax some nine months earlier - that is, six months after sales to consumers.
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